Recently, after some limited, targeted discovery, a NY Federal court dismissed the trade secret misappropriation case that was filed against our client. More specifically, the plaintiff, an online platform for the purchase of various automoblies, sought both injunctive relief and millions of dollars in damages, alleged that our client and one of his fellow former employees were liable under the Defend Trade Secrets Act (the “DTSA”) 18 U.S.C. § 1836, et seq., as well as New York common law, based upon the purported breaches of his restrictive covenants in his employment agreements.
In this case, the plaintiff made multiple attempts to secure injunctive relief aimed at barring our client from continuing to work in his chosen field for the remaining duration of his noncompete agreement. Agreeing with our position, the Court denied every one of these attempts, noting that "On these facts, I find that [plaintiff] has not made the clear showing of irreparable injury necessary to support the extraordinary and drastic remedy of issuing a TRO."
After ordering expedited discovery on certain limited issues that went to the heart of the case, the plaintiff was compelled to recognize that they simply did not have the evidence to support their claims, particularly regarding their allegations that the defendants' actions were enabled by their theft of plaintiff's purported "trade secrets." Therefore, they tried to shift gears and their theory of the case - both regarding liability and damages, but were called out by the Court for this tactic, as it stated
"[Plaintiff] modified its argument, asserting that [defendant] may have violated the agreement “regardless of whether [he] does his deals online, by phone, in person, or otherwise—as every deal [defendant] does is a potential deal that [plaintiff] loses” ...
"[Plaintiff]’s assertions about the scale of the harms imposed by [defendant]’s violation of the noncompetition
covenant have shifted as well. [Plaintiff] initially asserted that it suffered an 80 percent decrease in business with dealers who had worked with [defendant]. In a subsequent filing, however, it admitted that this number was in error, and instead asserted a 50 percent decrease in business after [defendant] left. Even this number, however, is based on just six dealers, and there is substantial variability in how much business was lost from each dealer. One dealer’s business with [plaintiff] decreased by 25 percent, while another dealer’s business decreased by 90 percent ... Updates provided in subsequent briefing do not fundamentally change this picture."
In the months that followed, plaintiff's picture - predictably - did not improve, and, the case was ultimately dismissed - a huge win for our client.
